EV = Emotional Value

What’s become hotter than Electric Vehicles? Emotional Value: the most important EV! 

Increasingly, brand separation both in terms of brand power and financial performance, is being driven by the emotional value consumers find in a brand. In the current economic environment in which most consumers are seeking cost effective solutions, it’s become challenging for them to purchase discretionary items that once delivered strong emotional value: a new sofa, a bigger TV, a trip to Florida, a fancy cup of coffee, and so on. 

With the exception of the luxury market, brands need to align with a fundamental consumer need to cut costs. The number one New Year’s resolution in 2024 was to reduce personal expenses and Magid economic tracking data suggests that the cost cutting imperative has only increased since January. 

But consumers are still seeking emotional value, even if they have to cut costs or trade down. In fact, the psychological state of the majority of Americans is driving them to seek more emotional value than ever. 60% of women under the age of 45 self-describe themselves as depressed and they’re looking to escape. That psychological escape is satisfied through certain emotional values. 

So it is the brands that can provide low cost solutions AND strong emotional value that are winning in today’s marketplace.

Emotional Value can be delivered by tangible product features or through perceptual association. For example, a rollercoaster ride at Disneyland is a tangible feature that is thrilling and fun. Dunkin’ is perceived as fun largely because consumers believe it’s fun after seeing its funny advertising. 

Magid’s Brand EmotionalDNA data suggests that brands that are cost effective and offer good value while also delivering emotional value are gaining market share.  

For example, Lay’s and Pringles are both potato chips, but they have different physical qualities. Both are seen as simple products that offer good value and affordability. Pringles, however, is perceived as being more fun and exciting than a bag of Lay’s. Lay’s is perceived as traditional and plain. Fun, energetic and exciting trump traditional and plain and, voila, Pringles wins that EV contest. 

Brands with higher EV are more successful. In the case of Lay’s and Pringles, while Lay’s is the largest selling potato chip brand in the US, Pringles is currently growing 4x faster than Lay’s. 

Mass retail is another interesting space. Walmart and Costco have delivered outstanding financial results lately whereas Target has lagged behind. Interestingly, all three are perceived as affordable and offering good value, with the edge there going to Walmart and Costco. But Costco and Walmart offer strong emotional values above and beyond price. Costco, for example, is seen as being extremely wholesome while Walmart is more approachable, fun and exciting. While all three retailers deliver on affordability, Walmart and Costco provide emotional values that set them apart. 

Perhaps most interesting is Temu. They rolled out a campaign early in the year with the slogan “Shop Like a Billionaire.” They have rock bottom prices but allow newly cost-conscious consumers to indulge in buying products so they continue to feel rich. And the ad campaign does a brilliant job of stoking this perception. In terms of emotional value, Brand EDNA shows us that Temu, while perceived as just as affordable as Target and Costco is more fun, exciting and different. When brands are tied for cost effectiveness, the win goes to the brand that delivers extra emotional value. This is why Temu is growing like a weed.